What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-06 compared with 2026-05-05 · 169 added, 120 removed, 247 unchanged (54% of the section changed)

5 unchanged sentences

Financial Highlights

2026 First Quarter Results of Operations

• Current accident year underwriting income was $5.5 million for 2026 compared to a current accident year underwriting loss of $10.3 million for the same period in 2025.

The current accident year underwriting loss for 2025 includes net losses and loss adjustment expenses related to California Wildfire events in January 2025 ("California Wildfires") totaling $15.6 million.

Excluding California Wildfires in 2025, the current accident year underwriting income increased 4.0% from $5.3 million in 2025 to $5.5 million in 2026.

o Current accident year combined ratio was 94.9% in 2026 compared to 111.5% for the same period in 2025.

Excluding California Wildfires, the current accident year combined ratio would have been 94.8% in 2025.

• Excluding California Wildfires in 2025, calendar year underwriting income increased from $5.1 million in 2025 to $5.3 million for 2026.

o Calendar year combined ratio was 95.1% in 2026 compared to 111.7% for the same period in 2025.

Excluding California Wildfires, the calendar year combined ratio would have been 95.0% in 2025.

• Gross written premiums were $96.5 million in 2026 compared to $98.7 million for the same period in 2025.

2026 Second Quarter Consolidated Results of Operations

• Current accident year underwriting income increased 3.2% to $5.8 million for 2026 from $5.6 million of underwriting income for the same period in 2025.

• Current accident year combined ratio was 94.7% in 2026 compared to 94.6% for the same period in 2025.

• Gross written premiums increased 9.6% to $117.1 million in 2026 compared to $106.8 million in 2025.

• Net earned premiums grew 3.7% to $98.7 million in 2026 from $95.1 million in 2025.

• Net investment income decreased to $12.2 million in 2026 from $14.8 million in 2025 attributable to a $1.9 million reduction in income from investments in limited partnerships (the Company expects a full recovery to be recorded in the 2 nd quarter of 2026) and $0.6 million reduction in investment income on the fixed maturities portfolio due to an increase in allocation to U.S.

• Net income of $4.2 million, or $0.29 per share diluted, in 2026 compared to net loss of $4.0 million, or ($0.30) per share diluted, for the same period in 2025.

Excluding California Wildfires, net income would have been $8.2 million or $0.58 per share in 2025.

2026 First Quarter Consolidated Financial Condition

• Total cash and investments of $1.4 billion at March 31, 2026 and December 31, 2025;

fixed maturities and cash comprise 98% of total investments.

• Total assets of $1.7 billion at March 31, 2026 and December 31, 2025.

• No debt at March 31, 2026 and December 31, 2025.

• Net investment income increased 11.2% to $16.4 million in 2026.

• Net income of $11.1 million, or $0.76 per share diluted, in 2026 compared to $10.3 million, or $0.71 per share diluted, for the same period in 2025.

2026 Year to Date Consolidated Results of Operations

• Current accident year underwriting income improved to $11.2 million for 2026 compared to an underwriting loss of $4.7 million in same period in 2025.

Current accident year combined ratio was 94.8% compared to 103.0% for the same period in 2025.

• Gross written premiums increased 3.9% to $213.5 million in 2026 compared to $205.5 million in 2025.

• Net earned premiums grew 4.6% to $197.0 million in 2026 from $188.5 million in 2025.

• Net investment income was $28.6 million in 2026 compared to $29.5 million in 2025 resulting from increased allocation to U.S.

• Net income of $15.3 million, or $1.05 per share diluted, in 2026 compared to $6.4 million, or $0.43 per share diluted, for the same period in 2025.

2026 Consolidated Financial Condition

• Total cash and investments of $1.4 billion at June 30, 2026 and December 31, 2025;

fixed maturities comprise 98% of total investments at June 30, 2026.

• Total assets of $1.7 billion at June 30, 2026 and December 31, 2025.

• No debt at June 30, 2026 and December 31, 2025.

• Since the Company's initial public offering in 2003, the total capital returned to shareholders was $659.8 million, comprising $522.2 million of share repurchases and $137.6 million of distributions / dividends.

This includes $10.3 million of distributions during 2026.

• Shareholders' equity was $704.1 million at March 31, 2026 compared to $706.6 million at December 31, 2025.

• Book value per common share was $47.92 at March 31, 2026 compared to $48.96 at December 31, 2025.

• Shareholders' equity was $710.9 million at June 30, 2026 compared to $706.6 million at December 31, 2025.

• Book value per common share was $48.28 at June 30, 2026 compared to $48.96 at December 31, 2025.

Results of Operations

The following table summarizes the Company’s results for the quarters ended March 31, 2026 and 2025:

The following table summarizes the Company’s results for the quarters and six months ended June 30, 2026 and 2025:

Quarters Ended

Six Months Ended

(Dollars in thousands)

10 unchanged sentences

Corporate expenses

Income (loss) before income taxes

Income tax (expense) benefit

Net income (loss)

Income before income taxes

Income tax expense

Underwriting Ratios:

3 unchanged sentences

NM - not meaningful

(1) Includes third-party distribution expenses of $1.1 million in 2026.

(1) Includes third-party distribution expenses of $1.2 million and $2.3 million for the quarter and six months ended June 30, 2026, respectively.

There were no third-party distribution expenses in 2025.

3 unchanged sentences

The following table summarizes the change in premium volume by reportable segment:

Quarters Ended March 31,

Quarters Ended June 30,

Belmont Non-Core

2 unchanged sentences

Net written premiums (2)

Six Months Ended June 30,

Belmont Non-Core

(Dollars in thousands)

Gross written premiums (1)

Net written premiums (2)

(1) Gross written premiums equal the sum of direct and assumed written premiums.

(2) Net written premiums equal gross written premiums less ceded written premiums.

Gross written premiums for Belmont Core decreased 1.9%:

Quarters Ended March 31,

Belmont Core's gross written premiums increased by 6.8% to $117.3 million for the quarter ended June 30, 2026 compared to $109.8 million for the same period in 2025 and increased 2.7% to $213.8 million for the six months ended June 30, 2026 compared to $208.2 million for the same period in 2025.

Quarters Ended June 30,

Six Months Ended June 30,

(Dollars in thousands)

4 unchanged sentences

Total gross written premiums

• Wholesale Commercial gross written premiums declined 5.2% during the first quarter of 2026 as the Company maintained its pricing and return standards amidst competitive market conditions, particularly as regards property rate reductions.

Wholesale Commercial’s property rate change was flat for the first quarter of 2026.

• Vacant Express and Collectibles' direct written premiums grew by 4.9% and 12.6%, respectively.

This growth was driven by premium rate increases, new agency appointments, and organic growth of existing agents.

• Direct written premiums for Specialty Products grew by 2.4% due to new products and organic growth from existing products partially offset by a decline in premiums for products terminated in 2025 due to not meeting profitability expectations.

• Belmont Core's assumed business grew to $11.2 million for the quarter ended March 31, 2026 from $10.9 million for the same period in 2025 due to new treaties incepting during 2025 and 2026 and organic growth from existing treaties.

• Wholesale Commercial's gross written premiums grew by 1.5% for the quarter ended June 30, 2026, and lower by 1.8% for the six months ended June 30, 2026.

The Company maintained its pricing and return standards amidst competitive market conditions, particularly as regards property rate reductions.

Wholesale Commercial’s rate change was flat for the quarter and six months ended June 30, 2026.

• Vacant Express and Collectibles' gross written premiums grew by 5.6% and 13.7% for the quarter ended June 30, 2026, respectively, and grew by 5.3% and 13.2% for the six months ended June 30, 2026, respectively, as compared to the same periods in 2025.

This growth was driven by new agency appointments, organic growth of existing agents, and premium rate increases.

• Gross written premiums for Specialty Products declined 35.7% and 21.0% for the quarter and six months ended June 30, 2026, respectively, as compared to the same periods in 2025 due to terminating products not meeting profitability expectations as well as being impacted by competitive market conditions.

• Assumed Reinsurance grew by 78.9% to $21.5 million and 42.5% to $32.7 million for the quarter and six months ended June 30, 2026, respectively, from $12.0 million and $23.0 million for the same periods in 2025 due to new treaties incepting during 2025 and 2026 and organic growth from existing treaties.

Belmont Non-Core's business represents run-off premium from non-renewed treaties.

Segment Income (Loss)

The components of income (loss) from the Company’s reportable segments and corresponding underwriting ratios are as follows:

Quarters Ended March 31,

The components of income (loss) from the Company’s reportable segments and corresponding underwriting ratios for the quarters ended June 30, 2026 and 2025 are as follows:

Quarters Ended June 30,

Agency and Insurance Services

20 unchanged sentences

Agency and Insurance Services segment

Agency and Insurance Services' segment loss was $0.4 million for the quarter ended March 31, 2026 compared to segment income of $1.8 million for the same period in 2025.

• Direct written premiums produced for Belmont Core was $80.1 million and $87.5 million for the quarters ended March 31, 2026 and 2025, respectively.

Commission income on premiums produced for Belmont Core was $9.5 million and $10.6 million for the quarters ended March 31, 2026 and 2025, respectively, and service fee income for technology and claims services provided to Belmont Core and Non-Core segments was $2.9 million and $3.5 million for the quarters ended March 31, 2026 and 2025, respectively.

Agency and Insurance Services' segment income was $1.4 million for the quarter ended June 30, 2026 compared to segment income of $2.3 million for the same period in 2025.

• Gross written premiums produced for Belmont Core was $87.9 million and $97.8 million for the quarters ended June 30, 2026 and 2025, respectively.

Commission income on premiums produced for Belmont Core was $10.5 million and $11.5 million for the quarters ended June 30, 2026 and 2025, respectively, and service fee income for technology and claims services provided to Belmont Core and Non-Core segments was $2.9 million and $3.4 million for the quarters ended June 30, 2026 and 2025, respectively.

These amounts are eliminated in the Company's Consolidated Financial Statements.

• Third-party commission and service fee income of $0.4 million for the quarter ended March 31, 2026.

There was no third-party commission and service fee income for the quarter ended March 31, 2025.

• Policy and installment fee income was $0.5 million and $0.4 million during the quarters ended March 31, 2026 and 2025, respectively.

• Other operating expenses increased $1.0 million to $13.6 million for the quarter ended March 31, 2026 compared to $12.6 million for the same period in 2025 primarily due to $1.1 million in third-party distribution expenses.

There were no third-party distribution expenses in the first quarter of 2025.

• Third-party commission and service fee income was $0.3 million for the quarter ended June 30, 2026.

There was no third-party commission and service fee income for the quarter ended June 30, 2025.

• Policy and installment fee income was $0.5 million for each of the quarters ended June 30, 2026 and 2025.

• Other operating expenses of $12.9 million for the quarter ended June 30, 2026 were in line with 2025.

Belmont Core segment

Belmont Core's segment income increased 145.3% to $5.2 million for the quarter ended March 31, 2026 compared to a segment loss of $11.6 million for the same period in 2025.

Excluding California Wildfires losses of $15.6 million in 2025, Belmont Core's segment income increased from $4.0 million for the quarter ended March 31, 2025 to $5.2 million for the quarter ended March 31, 2026.

The current accident year combined ratio improved 17.8 points to 94.7% for quarter ended March 31, 2026 from 112.5% for the same period in 2025 mainly due to the California Wildfires which impacted the combined ratio by 16.9 points in 2025.

• Net earned premiums within the Belmont Core segment increased by 6.6% to $98.4 million for the quarter ended March 31, 2026 compared to $92.3 million for the same period in 2025.

Property net earned premiums were $39.3 million and $37.7 million for the quarters ended March 31, 2026 and 2025, respectively.

Casualty net earned premiums were $59.1 million and $54.6 million for the quarters ended March 31, 2026 and 2025, respectively.

• The current accident year loss ratio improved by 16.8 points to 55.2% for the quarter ended March 31, 2026 compared to 72.0% for the same period in 2025 primarily driven by an improvement in the catastrophe loss ratio.

Belmont Core's segment income increased 23.4% to $3.4 million for the quarter ended June 30, 2026 compared to $2.7 million for the same period in 2025.

The current accident year combined ratio increased 0.6 points to 96.3% for quarter ended June 30, 2026 from 95.7% for the same period in 2025.

• Net earned premiums within the Belmont Core segment increased by 1.4% to $98.8 million for the quarter ended June 30, 2026 compared to $97.5 million for the same period in 2025.

Property net earned premiums were $39.3 million and $40.4 million for the quarters ended June 30, 2026 and 2025, respectively.

Casualty net earned premiums were $59.5 million and $57.1 million for the quarters ended June 30, 2026 and 2025, respectively.

• The current accident year loss ratio improved by 2.0 points to 54.1% for the quarter ended June 30, 2026 compared to 56.1% for the same period in 2025 primarily driven by an improvement in the catastrophe loss ratio.

• Net losses and loss adjustment expenses related to prior accident years were zero and $1.4 million for the quarters ended June 30, 2026 and 2025, respectively.

See Note 6 of the notes to the consolidated financial statements in Item 1 of Part I of this report for further discussion on prior accident year development.

The components of income (loss) from the Company’s reportable segments and corresponding underwriting ratios for the six months ended June 30, 2026 and 2025 are as follows:

Six Months Ended June 30,

Agency and Insurance Services

Belmont Non-Core

(Dollars in thousands)

Net earned premiums

Commission and service fee income

Policy and installment fee income

Total revenues

Losses and expenses:

Net losses and loss adjustment expenses

Net commission expenses

Other operating expenses (1)

Total losses and expenses

Segment income (loss)

Underwriting Ratios:

Current accident year

Prior accident year

Calendar year loss ratio

Expense ratio

Combined ratio

Accident year combined ratio

(1) Other operating expenses consist primarily of personnel expenses and general operating expenses related to underwriting and distribution activities.

Agency and Insurance Services segment

Agency and Insurance Services' segment income was $1.0 million for the six months ended June 30, 2026 compared to segment income of $4.1 million for the same period in 2025.

• Gross written premiums produced for Belmont Core was $168.0 million and $185.2 million for the six months ended June 30, 2026 and 2025, respectively.

Commission income on premiums produced for Belmont Core was $20.0 million and $22.0 million for the six months ended June 30, 2026 and 2025, respectively, and service fee income for technology and claims services provided to Belmont Core and Non-Core segments was $5.8 million and $6.9 million for the six months ended June 30, 2026 and 2025, respectively.

These amounts are eliminated in the Company's Consolidated Financial Statements.

• Third-party commission and service fee income was $0.7 million for the six months ended June 30, 2026.

There was no third-party commission and service fee income for the six months ended June 30, 2025.

• Policy and installment fee income was $1.0 million and $0.9 million during the six months ended June 30, 2026 and 2025, respectively.

• Other operating expenses increased $0.8 million to $26.5 million for the six months ended June 30, 2026 compared to $25.7 million for the same period in 2025 primarily due to $2.3 million in third-party distribution expenses.

There were no third-party distribution expenses in 2025.

Belmont Core segment

Belmont Core's segment income increased to $8.6 million for the six months ended June 30, 2026 compared to a segment loss of $8.8 million for the same period in 2025.

Belmont Core's segment loss for the six months ended June 30, 2025 includes net losses and loss adjustment expenses related to California Wildfire events in January 2025 ("California Wildfires") totaling $15.7 million.

Excluding California Wildfires in 2025, Belmont Core's segment income increased from $6.8 million for the six months ended June 30, 2025 to $8.6 million for the six months ended June 30, 2026.

The current accident year combined ratio improved 8.4 points to 95.6% for six months ended June 30, 2026 from 104.0% for the same period in 2025 mainly due to the California Wildfires which impacted the combined ratio by 8.3 points in 2025.

• Net earned premiums within the Belmont Core segment increased by 3.9% to $197.2 million for the six months ended June 30, 2026 compared to $189.8 million for the same period in 2025.

Property net earned premiums were $78.6 million and $78.1 million for the six months ended June 30, 2026 and 2025, respectively.

Casualty net earned premiums were $118.6 million and $111.7 million for the six months ended June 30, 2026 and 2025, respectively.

• The current accident year loss ratio improved by 9.2 points to 54.7% for the six months ended June 30, 2026 compared to 63.9% for the same period in 2025 primarily driven by an improvement in the catastrophe loss ratio.

The California Wildfires impacted the 2025 current accident year loss ratio by 8.3 points.

• Net losses and loss adjustment expenses related to prior accident years was less than $0.1 million for the quarters ended March 31, 2026 and 2025.

• Net losses and loss adjustment expenses related to prior accident years were zero and $1.4 million for the six months ended June 30, 2026 and 2025, respectively.

See Note 6 of the notes to the consolidated financial statements in Item 1 of Part I of this report for further discussion on prior accident year development.

The current accident year net losses and loss adjustment expenses and loss ratio are summarized as follows:

7 unchanged sentences

Total accident year losses

• The current accident year non-catastrophe property loss ratio was 43.3% for the quarter ended March 31, 2026 compared to 45.3% for the same period in 2025, an improvement of 2.0 points, driven by lower claims frequency.

• The current accident year catastrophe net losses and loss adjustment expenses decreased to $2.2 million for the quarter ended March 31, 2026 compared to $17.9 million for the same period in 2025 which included $15.6 million of catastrophe losses related to the California Wildfires.

Excluding California Wildfires in 2025, the current accident year catastrophe loss ratio improved from 6.0% for the quarter ended March 31, 2025 to 5.6% for the quarter ended March 31, 2026.

• The current accident year casualty loss ratio increased by 1.7 points during the quarter ended March 31, 2026 mainly driven by a change in mix of business.

• The current accident year non-catastrophe property loss ratio was 39.8% for the quarter ended June 30, 2026 compared to 40.5% for the same period in 2025, an improvement of 0.7 points, driven by lower claims frequency.

• The current accident year catastrophe net losses and loss adjustment expenses decreased to $2.9 million for the quarter ended June 30, 2026 compared to $5.2 million for the same period in 2025 driven by lower claims frequency.

• The current accident year casualty loss ratio increased by 0.6 points during the quarter ended June 30, 2026 as compared to the same period in 2025 mainly driven by a change in mix of business.

Six Months Ended

(Dollars in thousands)

Property losses

Non-catastrophe

Property losses

Casualty losses

Total accident year losses

• The current accident year non-catastrophe property loss ratio was 41.6% for the six months ended June 30, 2026 compared to 42.8% for the same period in 2025, an improvement of 1.2 points, driven by lower claims frequency.

• The current accident year catastrophe net losses and loss adjustment expenses decreased to $5.1 million for the six months ended June 30, 2026 compared to $23.1 million for the same period in 2025 which included $15.7 million of catastrophe losses related to the California Wildfires.

Excluding California Wildfires in 2025, the current accident year catastrophe loss ratio improved from 9.5% for the six months ended June 30, 2025 to 6.5% for the six months ended June 30, 2026 driven by lower claims frequency.

• The current accident year casualty loss ratio increased by 1.2 points during the six months ended June 30, 2026 mainly driven by a change in mix of business.

The following table summarizes the components of the expense ratio:

Quarters Ended March 31,

Quarters Ended

Six Months Ended

Net commission expenses

1 unchanged sentence

Expense Ratio

• Reduction in net commission expense ratio is primarily due to a change in mix of business, and effective February 1, 2026, the distribution of Specialty Products is managed directly by Belmont Core.

Belmont Non-Core segment

Belmont Non-Core segment comprises lines of business that have been de-emphasized or are no longer being written.

Belmont Non-Core recognized a segment loss of $0.3 million and $0.7 million during the quarters ended March 31, 2026 and 2025, respectively.

Belmont Non-Core recognized a segment loss of less than $0.1 million and segment income of $0.8 million during the quarters ended June 30, 2026 and 2025, respectively, and a segment loss of $0.3 million and segment income of less than $0.1 million during the six months ended June 30, 2026 and 2025, respectively.

Net investment income

Net investment income decreased 17.3% to $12.2 million for the quarter ended March 31, 2026 from $14.8 million for the same period in 2025.

Net investment income increased 11.2% to $16.4 million for the quarter ended June 30, 2026 from $14.7 million for the same period in 2025 and decreased 3.1% to $28.6 million for the six months ended June 30, 2026 from $29.5 million for the same period in 2025.

Quarters Ended

Six Months Ended

(Dollars in thousands)

2 unchanged sentences

Net investment income

• Net investment income from the Company’s fixed maturities portfolio decreased by 7.9% for the quarter ended March 31, 2026 as compared to the same period in 2025 primarily due to a lower average yield in 2026 as compared to 2025 due to an increase in allocation to U.S.

• Net investment income from equities increased by $0.5 million to $0.6 million for the quarter ended March 31, 2026 as compared to the same period in 2025 primarily driven by the Company's $25 million investment in common equities during the third quarter of 2025.

• Income from limited partnerships decreased by $1.9 million for the quarter ended March 31, 2026 which was attributable to the decline in market value in one of the Company's limited partnership investments during the first quarter of 2026.

We expect a full recovery related to this investment to be recorded in the second quarter of 2026.

• Net investment income from the Company’s fixed maturities portfolio decreased by 10.8% and 9.3% for the quarter and six months ended June 30, 2026, respectively, as compared to the same periods in 2025 primarily due to a lower average yield in 2026 as compared to 2025 due to an increase in allocation to U.S.

• Net investment income from equities increased by $0.4 million to $0.6 million for the quarter ended June 30, 2026 and increased by $0.9 million to $1.2 million for the six months ended June 30, 2026, respectively, as compared to the same periods in 2025 primarily driven by the Company's investment in common equities during the third quarter of 2025.

• Income from limited partnerships increased by $2.9 million and $1.0 million for the quarter and six months ended June 30, 2026, respectively, which was attributable to the increase in market value in one of the Company's limited partnership investments during the second quarter of 2026.

The Company's fixed maturities portfolio continues to maintain high quality with an AA- average rating, duration of 1.1 years, and consists of the following:

4 unchanged sentences

(1) Structured bonds include asset-backed, mortgage-backed, commercial mortgage-backed and collateralized mortgage obligations.

Excluding the structured bonds, the average duration of the Company’s fixed maturities portfolio was 0.4 years as of March 31, 2026 compared with 0.5 years as of December 31, 2025.

Excluding the structured bonds, the average duration of the Company’s fixed maturities portfolio was 0.4 years as of June 30, 2026 compared with 0.5 years as of December 31, 2025.

Structured bonds are subject to conditional prepayment rates whereas the remaining bonds have a set maturity date.

1 unchanged sentence

Net Realized Investment Gains (Losses)

The components of net realized investment gains (losses) for the quarters ended March 31, 2026 and 2025 were as follows:

The components of net realized investment gains (losses) for the quarters and six months ended June 30, 2026 and 2025 were as follows:

Quarters Ended

Six Months Ended

(Dollars in thousands)

2 unchanged sentences

Net realized investment gains (losses)

See Note 2 of the notes to the consolidated financial statements in Item 1 of Part I of this report for an analysis of total investment return on a pre-tax basis for the quarters ended March 31, 2026 and 2025.

See Note 2 of the notes to the consolidated financial statements in Item 1 of Part I of this report for an analysis of total investment return on a pre-tax basis for the quarters and six months ended June 30, 2026 and 2025.

Corporate Expenses

Corporate expenses consist of outside legal fees, other professional fees, directors’ fees, management fees & advisory fees, salaries and benefits for holding company personnel, development costs for new products, impairment losses, and taxes incurred which are not directly related to operations.

Corporate expenses decreased $0.5 million to $9.0 million for the quarter ended March 31, 2026 from $9.5 million for the same period in 2025 primarily due to a reduction in professional and advisory fees partially offset by an increase in severance related compensation.

Income Tax Expense (Benefit)

Income tax expense was $1.3 million on net income before tax of $5.5 million for the quarter ended March 31, 2026.

This compares to income tax benefit of $1.1 million on net loss before tax of $5.1 million for the same period in 2025.

Corporate expenses decreased $0.7 million to $6.8 million for the quarter ended June 30, 2026 from $7.5 million for the same period in 2025 primarily due to a reduction in professional and advisory fees.

Corporate expenses decreased $1.1 million to $15.9 million for the six months ended June 30, 2026 from $17.0 million for the same period in 2025 primarily due to a reduction in professional and advisory fees partially offset by an increase in severance related compensation.

Income Tax Expense

Income tax expense was $3.3 million on net income before tax of $14.4 million for the quarter ended June 30, 2026.

This compares to income tax expense of $2.8 million on net income before tax of $13.1 million for the same period in 2025.

Income tax expense was $4.6 million on net income before tax of $19.9 million for the six months ended June 30, 2026.

This compares to income tax expense of $1.7 million on net income before tax of $8.0 million for the same period in 2025.

See Note 5 of the notes to the consolidated financial statements in Item 1 of Part I of this report for a comparison of income tax between periods.

Net Income (Loss)

The Company had net income of $4.2 million during the quarter ended March 31, 2026 compared to net loss of $4.0 million for the same period in 2025.

Amounts recorded for unpaid losses and loss adjustment expenses represent management’s best estimate at March 31, 2026.

The Company had net income of $11.1 million during the quarter ended June 30, 2026 compared to net income of $10.3 million for the same period in 2025 and net income of $15.3 million during the six months ended June 30, 2026 compared to net income of $6.4 million for the same period in 2025.

Excluding California Wildfires, net income would have been $18.8 million for the six months ended June 30, 2025.

Amounts recorded for unpaid losses and loss adjustment expenses represent management’s best estimate at June 30, 2026.

Management’s best estimate is as of a particular point in time and is based upon known facts, the Company’s actuarial analyses, current law, and the Company’s judgment.

This resulted in carried gross reserves of $747.1 million and $750.2 million as of March 31, 2026 and December 31, 2025, respectively, and net reserves of $684.4 million and $689.3 million as of March 31, 2026 and December 31, 2025, respectively.

This resulted in carried gross reserves of $718.5 million and $750.2 million as of June 30, 2026 and December 31, 2025, respectively, and net reserves of $656.9 million and $689.3 million as of June 30, 2026 and December 31, 2025, respectively.

A breakout of the Company’s gross and net reserves is as follows:

March 31, 2026

June 30, 2026

Gross Reserves

14 unchanged sentences

Therefore, the Company believes management’s best estimate is more likely influenced by changes in severity than frequency.

The following table, which the

Company believes reflects a reasonable range of variability around its best estimate based on historical loss experience and management’s judgment, reflects the impact of changes (which could be favorable or unfavorable) in frequency and severity on the Company’s current accident year net losses and loss adjustment expenses estimate of $53.9 million for claims occurring during the quarter ended March 31, 2026:

The following table, which the Company believes reflects a reasonable range of variability around its best estimate based on historical loss experience and management’s judgment, reflects the impact of changes (which could be favorable or unfavorable) in frequency and severity

on the Company’s current accident year net losses and loss adjustment expenses estimate of $106.9 million for claims occurring during the six months ended June 30, 2026:

Severity Change

1 unchanged sentence

Frequency Change

The Company’s net reserves for losses and loss adjustment expenses of $684.4 million as of March 31, 2026 relate to multiple accident years.

The Company’s net reserves for losses and loss adjustment expenses of $656.9 million as of June 30, 2026 relate to multiple accident years.

Therefore, the impact of changes in loss frequency and severity for more than one accident year could be higher or lower than the amounts reflected above.

3 unchanged sentences

These non-GAAP financial measures or ratios should not be considered as a substitute for the most directly comparable GAAP measures or ratios and do not reflect the overall underwriting profitability of the Company.

Quarters Ended March 31,

Quarters Ended June 30,

Six Months Ended June 30,

(Dollars in thousands)

1 unchanged sentence

Net losses and loss adjustment expenses

Property - Belmont Core

19 unchanged sentences

Reconciliation of non-GAAP financial measures and ratios continued

Quarters Ended March 31,

Six Months Ended

(Dollars in thousands)

Consolidated current accident year underwriting income excluding California Wildfires

Underwriting income (loss) (1)

Effect of prior accident year (5)

Current accident year underwriting income (loss) (2)

Belmont Core segment income excluding California Wildfires

Belmont Core segment income (loss) (1)

California Wildfires net losses and loss adjustment expenses

Current accident year underwriting income excluding California Wildfires (2)

Belmont Core segment income excluding California Wildfires (2)

Net income excluding California Wildfires

Net income (loss) (1)

Net income (1)

California Wildfires net losses and loss adjustment expenses (net of tax) (3)

Net income excluding California Wildfires (2)

Consolidated calendar year underwriting income (loss) excluding California Wildfires net losses and loss adjustment expenses

Underwriting income (loss) (1)

California Wildfires net losses and loss adjustment expenses

Underwriting income excluding California Wildfires (2)

Belmont Core segment income excluding California Wildfires

Belmont Core segment income (loss) (1)

Impact of California Wildfires

Belmont Core segment income excluding California Wildfires (2)

Consolidated current accident year combined ratio excluding California Wildfires

Combined ratio (1)

Effect of prior accident year (5)

Current accident year combined ratio (2)

Impact of California Wildfires

Current accident year combined ratio excluding California Wildfires (2)

Consolidated calendar year combined ratio excluding California Wildfires

Combined ratio (1)

Impact of California Wildfires

Calendar year combined ratio excluding California Wildfires (2)

Belmont Core current accident year catastrophe loss ratio excluding California Wildfires

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(3) Represents net losses and loss adjustment expenses of $15.7 million less tax benefit of $3.3 million.

(4) See previous table for reconciliation of non-GAAP financial measures or ratios to its most directly comparable GAAP measure or ratio for current accident year catastrophe net losses and loss adjustment expenses.

(4) See previous table for reconciliation of non-GAAP financial measures or ratios to its most directly comparable GAAP measure or ratio for current accident year catastrophe loss ratio.

(5) Includes prior accident year adjustments for net losses and loss adjustment expenses and net commission expenses.

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Key differences relate to, among other items, deferred acquisition costs, limitations on deferred income taxes, reserve calculation assumptions and surplus notes.

See Note 19 of the notes to the consolidated

financial statements in Item 8 of Part II of the Company’s 2025 Annual Report on Form 10-K for further information on dividend limitations related to the insurance companies.

There were no dividends declared by the Company's insurance subsidiaries during the quarter ended March 31, 2026.

See Note 19 of the notes to the consolidated financial statements in Item 8 of Part II of the Company’s 2025 Annual Report on Form 10-K for further information on dividend limitations related to the insurance companies.

There were no dividends declared by the Company's insurance subsidiaries during the quarter and six months ended June 30, 2026.

Sources of operating cash consist primarily of net written premiums and investment income which are used to pay claims, operating expenses, and corporate expenses.

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Funds may be used to pay distributions to the Company’s shareholders.

Net cash provided by (used for) operating activities was $17.9 million and $2.4 million for the quarters ended March 31, 2026 and 2025, respectively, consisting of the following:

Quarters Ended March 31,

Net cash provided by (used for) operating activities was $33.7 million and $9.4 million for the six months ended June 30, 2026 and 2025, respectively, consisting of the following:

Six Months Ended

(Dollars in thousands)

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Net investment income

Income tax refund received

Income taxes paid

Net cash provided by (used for) operating activities

The decrease in cash flows of $43.1 million in 2026 compared to the same period in 2025 consists of:

• $11 million from non-investment cashflows driven by (i) decline in cash from premiums on discontinued assumed reinsurance and discontinued specialty product business and (ii) operating expenses due to higher severance and bonus related compensation, higher contingent commissions, and capital outlays for the Company’s multi-year investment to develop a proprietary cloud-hosted, multi-tenant platform for its property and casualty insurance products offset partially by a decline in net losses and loss adjustment expenses mainly driven by California Wildfires in 2025.

• $25 million from non-investment cashflows driven by (i) decline in cash from premiums on discontinued assumed reinsurance and discontinued specialty product business and (ii) operating expenses due to higher

severance and bonus related compensation, higher contingent commissions, and capital outlays for the Company’s multi-year investment to develop a proprietary cloud-hosted, multi-tenant platform for its property and casualty insurance products offset partially by a decline in net losses and loss adjustment expenses mainly driven by California Wildfires in 2025.

• $13 million from investment income mainly due to the timing of maturities on its U.S.

Treasury bills.

• $5 million increase in income taxes paid in 2026 reflects the decline in net operating loss carryforwards available to offset federal taxes.

The reconciliation of net income to net cash provided by (used for) operating activities is generally influenced by the following:

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See the consolidated statements of cash flows in the consolidated financial statements in Item 1 of Part I of this report for details concerning the Company’s investing and financing activities.

The Board of Directors approved a quarterly distribution payment of $0.35 per common share to all shareholders of record on the close of business on March 20, 2026.

Distributions paid to common shareholders were $5.0 million during the quarter ended March 31, 2026.

In addition, distributions of $0.1 million were paid to Global Indemnity Group, LLC’s preferred shareholder during the quarter ended March 31, 2026.

The Board of Directors approved a quarterly distribution payment of $0.35 per common share to all shareholders of record on the close of business on March 20, 2026 and June 18, 2026.

Distributions paid to common shareholders were $10.1 million during the six months ended June 30, 2026.

In addition, distributions of $0.2 million were paid to Global Indemnity Group, LLC’s preferred shareholder during the six months ended June 30, 2026.

Investment Portfolio

On July 31, 2023, the Company provided the Global Debt Fund, LP with a formal withdrawal request to fully redeem the partnership interest.

Partial redemption proceeds of $4.9 million were received during the quarter ended March 31, 2026.

The Global Debt Fund, LP had a fair market value of $2.4 million at March 31, 2026.

Other than the items discussed in the preceding paragraphs, there have been no material changes to the Company’s liquidity during the quarter ended March 31, 2026.

Partial redemption proceeds of $1.6 million and $6.5 million were received during the quarter and six months ended June 30, 2026, respectively.

The Global Debt Fund, LP had a fair market value of $2.9 million at June 30, 2026.

Other than the items discussed in the preceding paragraphs, there have been no material changes to the Company’s liquidity during the quarter and six months ended June 30, 2026.

Please see Item 7 of Part II in the Company’s 2025 Annual Report on Form 10-K for information regarding the Company’s liquidity.

Capital Resources

There have been no material changes to the Company’s capital resources during the quarter ended March 31, 2026.

There have been no material changes to the Company’s capital resources during the quarter and six months ended June 30, 2026.

Please see Item 7 of Part II in the Company’s 2025 Annual Report on Form 10-K for information regarding the Company’s capital resources.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis